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Reasons for student debt consolidation
11/17/2009
There are a number of reasons why students may consider debt consolidation, including getting a better rate or having more time to pay off loans.
A recent article from the Chicago Tribune noted that one reason why students may consider debt consolidation of their loans is to gain greater simplicity. Rather than having multiple payments, debt consolidation allows students to roll what they owe into one loan.
"So you won't have to keep track of multiple loans," the Tribune report stated.
One advantage in doing so is that students may end up getting a longer time to pay off their loans, which can reduce their monthly costs. Another reason a person may consider loan consolidation is that their credit score may have improved since they originally got their loan, which could lead to a lower interest rate.
However, students should keep in mind that federal loans and private loans need to be consolidated separately. The federal government, and a few private loan providers, offer programs for student loan debt consolidation.
Students aren't the only people who can benefit from debt consolidation. People with multiple credit card debts may consider it for the same reasons that students would, including the potential for lower rates.
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